It's called PV for short and it stands for Present Value. Any financial planner knows what I'm talking about. When one looks at a steady stream of income from a source, for example, a pension, he only looks at, say $50,000 a year. Whereas the entity holding the fund looks at a required $1 million @ 5% to be able to make that payment. Actually less since eventually the person will die or the entity will procure new contributions but I think you see the point.